Top 10 Reasons to Nearshore Software Development to LATAM

This comprehensive list will make you consider nearshore software development if you are not already doing it. 

You might have good feelings about it or not, but the truth is that nearshore software development is a thing. It has been around for quite some time already. Many companies of different sizes take advantage of it, from corporations like Pfizer, Coca-Cola, or Intel to small businesses. This means something about it can give you an edge over your competitors. Nearshore software development is the safest move to reduce costs and deliver more work. Let me show you why you should be taking advantage of this model and how you could have your stakeholders, decision-makers, and finance officers very excited about it. 

First, let me quickly explain what nearshore software development is. In case you are new to this, it consists in outsourcing part of your software development to a location abroad but near your central location. For instance, Costa Rica if you are in North America. This means that if you are outsourcing to remote areas, you are not nearshoring. 

But let’s jump into it. Back in 2009, Sapiens Development started a nearshore location in Costa Rica, but before we did it, we had to evaluate many locations in Latin America. Our objective was to give our outsourcing clients in North America high-quality services at a lower rate—a rate even lower than hiring their staff directly, which no one wants to do. During our investigation, Costa Rica consistently outperformed all other locations, so we decided to jump head-first into the adventure. Since we opened the Costa Rican operation, it has given us many advantages over competitors that don’t do nearshore. We can offer better prices and deliver more high-quality work. So, you could use our operation to increase your IT department’s productivity and reduce costs. Look at the ten reasons we chose Costa Rica as our head nearshore software development destination. 

1- A Fresh Talent Hub at a Fraction of the Cost 

I am sure you know how difficult it is to hire and retain IT talent in the US or Canada. You would know it even if you have spent as much as one day in the IT industry. Talent at a reasonable price is a rare find, and good developers are as scarce as hen’s teeth. Quickly search Glassdoor.com or Payscale.com for an IT position in your city. You will get hundreds of open positions offering sky-high salaries and benefits. Your talent competition is always knocking at your door, but why do you keep searching in the same place if talent is everywhere? Doesn’t walking the whole market and finding a good deal make sense? Well, nearshore software development is all about that. 

Here is where it starts getting good. Costa Rica has a unique ecosystem that produces excellent and competitive professionals with surprising ease. Since 1948, Costa Rica abolished its army and dedicated all its funds to educating its people. Mind-blowing. Seventy years later, this small country of only 5 million inhabitants has five public universities and about 50 private ones, some of which are listed in the top 100 best universities in the world. Costa Rica’s IT scene is booming with young professionals working for companies like Sapiensdev.com, allowing us to provide 30% to 50% lower rates than hiring your local resources in North America. 

That is why companies like Intel, Amazon, Google, HP, Dell, and Microsoft have their nearshore software development operations in the country, and many others consume services from companies that do. 

2- Time Zone Overlaps 

Being able to telecommute with someone simultaneously makes a big difference. Nearshore software development is all about that. Coordinating with someone in a different time zone during your sleep hours is not good. As you can imagine, communication and sleeping don’t go well. The difficulty of coordinating with your workers during your regular business days adds so much risk to a project. That is one of the most significant drawbacks of outsourcing to remote locations. 

With a nearshore software development team in Costa Rica, you don’t need to worry. You have that covered. Your team is working at the same time that you are. Making communication easy as triggering a phone call or web meeting when needed. 

Costa Rica’s time zone is in line with US Central Time most of the year. This allows some Costa Rican providers to span their shifts +/-1 hours to align with their client’s time zones. For instance, here at Sapiensdev.com, we have different schedules for our employees according to their client’s locations. Programs span +1 or -2 hours from the official time to ensure they work simultaneously as their client, making it easier to telecommute and conveniently avoid peak traffic hours. 

Communication is critical to success in software development. I have to say that I learned this the hard way. The project becomes compromised if you can’t communicate directly, clearly, and quickly. If things can go wrong, they will go wrong. Nearshore software development makes communication easier. Having your team in the same time zone is a great way to keep risk in line. It has worked for us and our clients. 

3- Travel Proximity 

Occasionally, you must pack your stuff and travel to your nearshore software development location. It makes a significant difference if you can do it on a 3-hour direct flight instead of a 12-hour flight with three layovers. You can take my word for this. 

Costa Rica is so close that you can be there at about the same time as any domestic flight: 

Also, Costa Rica’s tourism industry is so big that there is always a good hotel offer. You will most likely be accommodated in a nice place close to your team. There is also a wide variety of transportation options, from taxi cabs to public buses, trains, rentals, and Ubers. And let’s face it, who will not enjoy a nice trip to Costa Rica? After all, it’s not your fault that your nearshore software development team is in a tropical paradise. 

4- Cultural Affinity 

This is one of those things that make Costa Rica stand out from other nearshore locations.  Costa Rica’s history is quite different from that of its sibling nations. For instance, can you guess which was the 3rd city in the world to have electric street lights? Yes, San José, Costa Rica, just after New York and Paris. Did you know that Costa Rican astronaut, Franklin Chang, has been part of 7 NASA space missions? He is also part of the Astronaut Hall of Fame. Lastly, Costa Rican companies, working alongside North American companies, are essential in space exploration, technology, and aeronautics. 

The way Costa Ricans communicate is frank, honest, and direct. The way they work is very much like what you are accustomed to in the States or Canada. You only need to stand in any corner in San Jose, and you will not notice much difference from being in the States: malls, the same fast-food restaurants, stores, and Starbucks. Everything is almost the same if you ignore the mountains, volcanoes, and people selling stuff on the street. There is a vast ex-pat community of retirees, students, and business owners that will make you feel at home if you stop by to do some business. 

5- English Fluency 

If you get a glimpse at the English Proficiency Index (EPI), Costa Ricans rank as moderate speakers. However, the impression is much better when you get there. 

As an example, already since 2015, a test was conducted by Idioma Internacional on 10,444 Costa Ricans. The Business English Level Test, or BELT©, was aligned with the European Framework of Reference for Languages (CEFR) terminology. Six levels range from beginner to advanced (A1, A2, B1, B2, C1, C2). The results yielded that every 7 out of 10 subjects rank from high intermediate (B2) to low advanced (C1), which is around the top-notch of moderate English speakers. 

But how does Costa Rica compare to other countries regarding English fluency? Well, the EPI shows that Costa Rica’s level is better than those of other nearshore destinations like the following: 

It slightly falls behind the following country: 

And it beats even popular remote (not nearshore) destinations like the following: 

So yes, amigo, English is widely spoken in Costa Rica, with people between the ages of 25 – 34 having the most proficient English skills. 

6- Familiarity with US and Canada’s Laws and Regulations 

As you might know, US and Canada’s laws are derived from what was known as the Common Law, applied in England during the Middle Ages, while Latin American countries’ laws are based on the Roman Law. Both are different paths to achieve the same objective, justice, but those differences sometimes create some confusion. 

Costa Rica fills this gap with the experience that its companies have accumulated over the past 170 years of trading with the US and Canada. The first treaty between the United States and Costa Rica was a Treaty of Friendship, Commerce, and Navigation, signed in Washington on July 10, 1851. Opposite to other countries, Costa Rica has a long story of being open to commerce. This has made them very savvy about the laws and regulations that affect trade and businesses with their commercial partners abroad. 

7- Culture of Innovation 

Costa Rica’s innovation scene is vibrant and dynamic. Universities such as Instituto Tecnológico de Costa Rica and many private institutions have consistently backed up innovation startups and investigations for many years. The government approved a bill to support ID+i back in 2014. This led the country to rank 54 in the Global Innovation Index of 2022 (see rankings), which speaks very well of the Central American country, primarily considering that European and Asiatic countries occupy the top 100 positions with far more populations than Costa Rica. I can’t think of a better example of performance optimization than that. 

Startups, co-working spaces, incubators, accelerators, and angel investors are blooming all over the capital city of San José and also in nearby towns such as Alajuela, Heredia, and Cartago. This has made the ecosystem grow more extensive and more dynamic. Attracting over 20 Fortune 100 companies and more than 250 multinational corporations. According to the World Bank, Costa Rica ranked 1st high-tech exporter in Latin America. 

8- Universities and Colleges 

Education is a matter of significant importance for Costa Ricans. As I mentioned in this post, there are five national universities and about 50 private ones, all of which take their role very seriously. Software engineering-related majors, minors, and technical degrees are among the most demanded. The IT scene includes hackathons, programming tourneys, meetups, conferences, and shows. 

Universities communicate well with the business sector, organizations, and the government. This helps them to be up to date with their requirements to produce the right kind of professionals for the market. At Sapiensdev.com, we even have arrangements with universities that allow us access to fresh talent. We also collaborate with their education and help them build experience. This is very important if you want to nearshore because it makes it possible for your talent pool never to get empty. 

9- Strong Institutions and Business Organizations 

Let’s say for a moment that you are ready to nearshore your software development to Costa Rica—being that the case, you are not doing it alone. It is not just you and the provider you choose walking side by side. You will be backed up by organizations such as Procomer, Costa Rica’s commerce promotion agency. Recently, Procomer has been designated the best promotion agency in the world for four years. They can help you select a verified and experienced provider and support you in the selection process. There is also Cinde, the agency in charge of investment promotion. They can help you if you want to transform your nearshored operation into your offshore operation. Both Procomer and Cinde are government agencies. 

On the private side, several organizations, such as the Chamber of IT Companies (Camtic) and Central Gate, are the Costa Rican cluster of high-technology companies. Central Gate does great work attending to requirements from foreign clients that want to do the nearshore part of their operations. They can help you narrow the list to the right provider or group of providers. Making sure that you get all your requirements covered seamlessly, Sapiensdev.com is proud to be one of the Central Gate founders. 

10- Experienced Nearshore Software Development Companies 

For over 30 years, Costa Rican companies have been providing software development services to clients in North America. This is no new trend for them. Most Costa Rican providers like Sapiensdev.com have registered organizations and bank accounts in the US. This makes signing contracts and sending payments easy. Their representatives visit their clients and prospects in the US and Canada. They know the drill for delivering software development services, and it gets even better. They have experience solving problems in various verticals and company sizes. So chances are, they already know how to deal with your requirements. They can even provide good input on how to get it done, taking control of the whole project and leaving your head free to attend to other requirements. 

What are the top ten reasons we decided to nearshore in Costa Rica? Hopefully, with our help, you will too. I hope you found value in this post. If you were looking for information on how to reduce costs and be able to get more done with your budget, I hope that now you will be considering Sapiensdev.com as your partner. Be sure to leave a comment or question and visit our contact page to get an estimation. Also, mention this post, and you will get a free consultancy about that project you have in mind. 

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